EDITORIAL: A new agenda for the next five years

by Peter Westmore

News Weekly, March 16, 2013

The collapse in support for the Gillard Government since the start of February has been extraordinary, with opinion polls showing that if an election were held now, the Liberal-National Party coalition would be elected in a landslide.

Even the Prime Minister’s week-long visit to western Sydney — a clear breach of her promise to govern, not to campaign — turned into a fiasco, with a Channel 7 News poll of over 1,600 residents in Sydney’s west showing that 39 per cent of voters preferred Mr Abbott as Prime Minister, followed by Kevin Rudd at 26 per cent, Malcolm Turnbull at 22 per cent, and Julia Gillard at just 13 per cent.

It seems that, despite the multi-billion dollar handouts and photo-ops with school children and hospital patients, the Prime Minister lacks credibility — even in Labor’s traditional heartland.

There are many factors contributing to Labor’s slide. However, most prominent is the widespread perception that Labor is reckless with taxpayers’ money, makes promises it cannot keep, bankrolls bodies such as the Climate Commission, and is dependent in parliament on the votes of the Greens, Independents and tainted politicians such as Craig Thompson and Peter Slipper. All these things have damaged the Labor brand.

Additionally, there is the widespread belief that the carbon tax and mining tax have damaged Australia’s economy, produced little revenue for governments, and put at risk the mining industry on which much of Australia’s current prosperity depends.

On social policy, Labor has done little for single-income two-parent families and, with so many Labor MPs (state and federal) incessantly pushing for same-sex marriage, the party has alienated itself from many of its traditional working-class supporters.

For the federal Opposition, the challenge is to set a new agenda for Australia, not just for the forthcoming election but for the long-term future.

I would suggest that the Coalition needs to set a direction for Australia based on defending marriage as defined in Australian law, and giving more support to two-parent families trying to raise children on a single income — a model still preferred by most families.

While the Coalition’s opposition to the carbon tax and mining tax is welcome, it needs to articulate a clear-cut alternative agenda across a range of policy areas, starting with the taxation system.

In all the talk about the taxation system, little attention has been given to the impact of taxation on Australian families.

Dr Stephen Smith, senior lecturer in accounting at Monash University, recently called for a radical simplification in Australia’s complicated system of family payments, and for the replacement of our current individual-based tax with an optional family-based system.

“The basic rationale in each country is the same: the household, not the individual, is the basic economic unit of society, so the family should be treated as a single unit for taxation purposes.

“There are several arguments for simplifying the tax transfer system. It would eliminate perverse incentives not to work. A fundamental problem with the current, means-tested tax-transfer system is that the very system designed to alleviate poverty can actually entrench poverty, particularly at low income levels, when the system imposes large penalties for earning extra income.”

Separately, the Coalition needs to address the real concerns which surround the future of manufacturing industry, and the continuing problems of rural Australian communities — problems which extend far beyond the recurrent challenges of drought, floods and bushfires.

It is widely recognised that Australian manufacturing and agriculture are adversely affected by our high exchange-rate, which allows cheap imports to flood into the country and makes our exports dearer. There is little doubt that Australia is paying a high price for maintaining a floating exchange rate, unlike some of our major trading partners, such as China and Japan, which deliberately keep the exchange value of their currencies low to give their exports a competitive advantage.

But additionally, our local businesses are damaged by the fact that much of what is imported into Australia is produced in plants where standards of manufacture and safety are either non-existent, or far lower than what is required of Australian industry. This should not be permitted.

Further, Australia’s anti-dumping regime puts the onus on Australian businesses to prove that subsidised imports are coming into the country. The onus of proof should be reversed, as happens in countries such as the United States.

In relation to Australia’s defence, there needs to be a reversal of the government’s cutbacks which have damaged Australia’s capacity to defend itself, to protect its borders and contribute to multilateral peace-keeping activities. Current levels of defence spending, as a proportion of GDP, have fallen to 1.3 per cent — a level last seen in the late 1930s.

Other issues need to be addressed, as well. But the Australian people are desperate for leadership which goes beyond the demands of the political cycle, and look to the Opposition to provide it.